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Inside this issue
Tesla Takes Franchise Fight to the States
Auto Spending is a Bright Spot in Economy
Study: Fickle Shoppers Need Salespeople
Fisker Without Fisker: What's Next?
Mitsubishi Determined to Stay in U.S.
VW Profit Lead Over Toyota Under Threat as Demand Wobbles
Hyundai Capacity Limits to Limit U.S. Sales Expansion
New Steels Fight Aluminum to Oust Heavy Metal From Cars
Video: Relief Efforts Continue Months After Hurricane Sandy
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Tesla Takes Franchise Fight to the States

Tesla Motors is going on offense in battles with dealer associations over its retail model. As dealers in some states try to tighten franchise laws to block factory-owned dealerships, Tesla is aggressively lobbying policymakers, reaching out to fans to foster public support and even countering with its own franchise law proposals. Dealer association heads say they are trying to enforce or clarify existing laws restricting factory ownership of dealerships. They say they won't back down and will do more lobbying to convince lawmakers and the public of the benefits of the franchise system, including its advantages for consumers over manufacturer-owned stores. Dealer advocates say the disagreement is not about the car. They're not against electric vehicles, they say; the fight is about the way those vehicles are sold. Jim Moors, director of franchising and state law for the National Automobile Dealers Association, said he is only aware of proposed legislation addressing factory stores in Minnesota and Massachusetts. NADA says 48 states already restrict or prohibit factory ownership of stores. It's not just a Tesla issue, Moors said. "The idea of manufacturers and distributors owning dealerships has been a longstanding concern," he said. The face-off with Tesla, though, makes publicizing the benefits of the franchise system a top priority for NADA and state dealer associations. Said Moors: "It's something we'll probably spend a lot more time doing."
Source: Automotive News

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Auto Spending is a Bright Spot in Economy

An unexpected decline in confidence among American consumers -- driven in part by higher gas prices, squabbling over federal government cuts and smaller paychecks -- may be an indicator that spending has cooled. But, analysts say, there are still some positives: a strong stock market, modest non-energy consumer price inflation, gains in housing -- and a desire to buy automobiles.
Source: Detroit Free Press

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Study: Fickle Shoppers Need Salespeople

Even though online shopping gives shoppers more information and clout, salespeople still play a key role in closing deals, given the propensity of shoppers to change their minds late in the buying process. So concludes a study by lead generator Autobytel. During the first nine months of 2012, 54 percent of shoppers who submitted a new-car purchase request handled by Autobytel ultimately bought a different nameplate than the one requested, CEO Jeff Coats said. A similar percentage of shoppers submitting used-car purchase requests, known in the industry as a sales lead, changed their minds before buying a vehicle, Autobytel found. The company compared Autobytel leads sold with vehicle registrations recorded by R.L. Polk & Co. Coats said the study reaffirms the role of store salespeople and good follow-up processes in closing a deal. "You have to give the customer a variety of options," Coats said.
Source: Automotive News

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Fisker Without Fisker: What's Next?

Infusion of Chinese cash is a good bet

What happens to Fisker Automotive now that Henrik Fisker is gone? Having produced no cars since last summer and scrambling to find new investors, Fisker's fate may be to pawn its technology and assets to Chinese automaker Zhejiang Geely. That prospect may have led to the resignation of the 49-year-old designer/entrepreneur as executive chairman of the plug-in hybrid automaker that bears his name. In an e-mail to Automotive News last week, Henrik Fisker cited "several major disagreements" with "Fisker Automotive executive management on the business' strategy." He declined to elaborate and said he does not have another job in the works. What is Fisker without Fisker? Late last week, the Fisker Automotive Web site still splashed several photos of the founder posing confidently with the car. About 1,800 Fisker Karmas have been built, but none since battery maker A123 Systems declared bankruptcy last summer, leaving Fisker without a battery supplier. Zhejiang Geely, which owns Volvo, leads the bidding to take over Fisker Automotive, according to news reports. But China's Dongfeng Motor Co., which has some collaboration with EV zealot Nissan Motor Co., also has expressed interest.
Source: Automotive News

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Mitsubishi Determined to Stay in U.S.

Mitsubishi is determined to stay in America, will gradually expand its lineup and has learned a lesson or two from a cool U.S. market response to its small electric car, a company executive says. With fellow Japanese auto maker Suzuki closing down its U.S. sales unit, many industry observers have predicted Mitsubishi will leave, too. They say that's because the two share similarities of being small players with falling sales. But Mitsubishi has more going for it, enough to stay competitive in the U.S., says Masatoshi Hasegawa, Mitsubishi Motors North America's executive vice president-corporate planning.
Source: WardsAuto

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VW Profit Lead Over Toyota Under Threat as Demand Wobbles

Volkswagen AG Chief Executive Officer Martin Winterkorn can check one thing off his to-do list: beat rivals in profit. VW, which six years ago set out to become the world's biggest carmaker and a leader in profitability by 2018, reported record operating income of 11.5 billion euros ($15 billion) for 2012. That surpassed General Motor Co.'s $7.9 billion and Toyota Motor Corp.'s 1.06 trillion yen ($11.1 billion) for the year. When Winterkorn set the growth targets in 2007, VW didn't look much like a world-beater. It had just gone through a disruptive round of job cuts, its namesake brand was barely breaking even, and Toyota earned about $10 billion more than VW. This year's race will be tighter and may come down to currency fluctuations. With Toyota bouncing back from product recalls and natural disasters, the Japanese manufacturer is set to report 1.7 trillion yen in operating profit this calendar year, according to estimates compiled by Bloomberg.
Source: Bloomberg

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Hyundai Capacity Limits to Limit U.S. Sales Expansion

Hyundai Motor Co., after boosting U.S. sales of its cars and trucks 75 percent since 2008, expects its slowest annual growth in the market in five years as the South Korean company bumps up against limits in plant capacity. Deliveries of Hyundai vehicles should rise 4.4 percent to 734,000 this year, John Krafcik, chief executive officer of the Seoul-based automaker's U.S. sales unit, said in an interview last week. The increase of about 31,000 units from 2012 will result from improved efficiency at Hyundai's Montgomery, Alabama, factory, he said. “All of our Korean plants are very tight, as is our plant in Alabama” and a Kia Motors Corp. factory in Georgia that builds the Santa Fe sport-utility vehicle for Hyundai, Krafcik said during a test drive of the redesigned SUV in San Diego. “There are no plans to expand capacity. We have shown the last few years that without a new plant we've been very capable of finding incremental production.”
Source: Bloomberg

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New Steels Fight Aluminum to Oust Heavy Metal From Cars

New high-tech products mean steel is now winning battles in a long war to defend its share of the auto market against lighter aluminum, as automakers have to shed weight to meet emissions standards. But aluminum is set for further gains over the next decade as the United States slashes the weight of bulky pickup trucks and SUVs, while high-strength steel grades are likely to dominate in Europe. Conventional steel will be the big loser in both areas. The amount of aluminum -- which is more expensive but a third of the weight of conventional steel -- in cars and light trucks has shot up, tripling in North American and European cars over the past two to three decades. Steel, long dominant in the industry, has been fighting back and has scored a string of successes as many top automakers opt for new grades of high strength steel over aluminum to trim the weight of new models.
Source: Reuters

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Video: Relief Efforts Continue Months After Hurricane Sandy


When Hurricane Sandy slammed into the Northeast last fall, hundreds of dealership employees were hit hard. Dealers across the nation rallied to help. The day after the storm, the NADA Foundation mobilized its Emergency Relief Fund, established in 1992 to help dealership employees affected by natural disasters. NADA and the Greater New York Automobile Dealers Associations jump-started the fundraising with significant contributions so that the Foundation could begin helping dealership employees right away. Within days, dealers and state and metro dealer associations all over the country sent donations. To date, the Fund has assisted nearly 700 dealership employees whose lives were disrupted by Sandy (see a video profile of one of them here). The need is ongoing; click here to donate or apply for assistance.
Source: NADA-TV

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Quotable
"The idea of manufacturers and distributors owning dealerships has been a longstanding concern." 

    -- Jim Moors, director of franchising and state law for NADA, commenting on the battle between state dealer associations and Tesla over its retail model, Automotive News, March 18
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